Effective Tax Administration (ETA)
An offer in compromise basis for someone who could pay in full but where doing so would cause hardship or would be inequitable. It comes in two forms.
Full Definition
Effective Tax Administration is the offer in compromise basis used where the liability could be paid in full but the IRS may still compromise it. Form 656 splits it in two.
The first is Economic Hardship, selected with: "I owe this tax liability and have enough in assets and income to pay my liability in full. Due to my special circumstances, requiring full payment would cause an economic hardship." The form notes that only individuals are considered on this ground, and requires a detailed explanation attached.
The second is Public Policy or Equity, selected with: "I owe this tax liability and have enough in assets and income to pay my liability in full. Due to my exceptional circumstances, collection of the full liability would undermine public confidence that the tax laws are being administered in an equitable manner." The example the form gives is a payroll service provider having misappropriated taxes withheld from an employer's employees. This ground also requires a detailed explanation.
What separates ETA from Doubt as to Collectibility is the starting point: ETA begins from the position that the money is there.
What to do next
Read Form 656-B on irs.gov. Both grounds require a detailed written explanation attached to the offer, so the explanation is the work.
What this page does not say
- Both grounds turn on circumstances the IRS weighs case by case and require a detailed written explanation. This page states what the form says; it cannot indicate how any particular explanation would be received.
Sources
- Form 656-B, Offer in Compromise Booklet (Rev. 4-2026) — Internal Revenue Service, retrieved 2026-08-20
Last reviewed 2026-08-20 by Tax Resolution Clarity editorial.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice.
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Where to go next
The IRS publishes the rules this page describes. Your own notice governs your dates.